Domestic Economy Clouded by Fourth Lockdown

Economic momentum was again impacted by restrictive measures (fourth lockdown) in the fourth quarter of 2021 with COVID-19 infection figures rising again. As a result, domestic economic output declined quarter-on-quarter after recovering in the second quarter and in the third quarter of 2021 (+4.2 percent and +3,8 percent, respectively). According to the first calculations, GDP decreased by 2.2 percent in the fourth quarter of 2021 (key figure according to Eurostat). Year-on-year, compared with the fourth quarter of 2020 – where measures of the second lockdown shaped economic activity –, the value increased by 5.4 percent.

As before, the health policy restrictions in the fourth quarter of 2021 mainly affected the consumer-related service sectors. Value added in trade, accommodation, food service activities and transport fell by 5.6 percent in the fourth quarter of 2021; in other services, which include personal services (such as hairdressers), arts, entertainment and recreation, the decline in value added was 5.8 percent (both compared with the previous quarter). In line with this, consumer demand by households (including private non-profit institutions serving households) declined (–1.4 percent compared to the third quarter of 2021).

Industrial and construction activity also lost momentum against a background of supply bottlenecks. Value added in industry (NACE B to E) fell by 1.7 percent in the fourth quarter. A decline of 1.4 percent was recorded in the construction industry.

In foreign trade, the slowdown in industry and lower demand for travel dampened the development. Exports and imports each fell by 1.2 percent. Investment demand remained stable. Gross fixed capital formation hardly changed quarter-on-quarter (+0.4 percent).

Important information

The WIFO Flash Estimate is a first estimate for the past quarter. It is based on the Quarterly National Accounts of Statistics Austria and includes GDP as well as components in the form of seasonally and working-day adjusted rates of change compared with the previous quarter (key figure according to Eurostat standard).

On 4 March 2022, Statistics Austria will publish quarterly GDP data and main aggregates for the fourth quarter of 2021 based on more complete data, as well as preliminary annual data for 2021.